Has Labor Income Become More Volatile? Evidence from International Industry-Level Data
Claudia M. Buch
German Economic Review,
No. 4,
2013
Abstract
Changes in labor market institutions and the increasing integration of the world economy may affect the volatility of capital and labor incomes. This article documents and analyzes changes in income volatility using data for 11 industrialized countries, 22 industries and 35 years (1970–2004). The article has four main findings. First, the unconditional volatility of labor income has declined in parallel to the decline in macroeconomic volatility. Second, the industry-specific, idiosyncratic component of labor income volatility has hardly changed. Third, cross-sectional heterogeneity is substantial. If anything, the labor incomes of high- and low-skilled workers have become more volatile relative to the volatility of capital incomes. Fourth, the volatility of labor income relative to the volatility of capital income declines in the labor share. Trade openness has no clear-cut impact.
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Towards Deeper Financial Integration in Europe: What the Banking Union Can Contribute
Claudia M. Buch, T. Körner, Benjamin Weigert
IWH Discussion Papers,
No. 13,
2013
Abstract
The agreement to establish a Single Supervisory Mechanism in Europe is a major step towards a Banking Union, consisting of centralized powers for the supervision of banks, the restructuring and resolution of distressed banks, and a common deposit insurance system. In this paper, we argue that the Banking Union is a necessary complement to the common currency and the Internal Market for capital. However, due care needs to be taken that steps towards a Banking Union are taken in the right sequence and that liability and control remain at the same level throughout. The following elements are important. First, establishing a Single Supervisory Mechanism under the roof of the ECB and within the framework of the current EU treaties does not ensure a sufficient degree of independence of supervision and monetary policy. Second, a European institution for the restructuring and resolution of banks should be established and equipped with sufficient powers. Third, a fiscal backstop for bank restructuring is needed. The ESM can play a role but additional fiscal burden sharing agreements are needed. Direct recapitalization of banks through the ESM should not be possible until legacy assets on banks’ balance sheets have been cleaned up. Fourth, introducing European-wide deposit insurance in the current situation would entail the mutualisation of legacy assets, thus contributing to moral hazard.
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28.10.2013 • 37/2013
Institut für Wirtschaftsforschung Halle erhält Auszeichnung für Chancengleichheit
28.10.2013 – Das IWH wurde als eine von 59 Organisationen aus Wirtschaft, Wissenschaft, Verwaltung und Verbänden am Montag in Stuttgart für Chancengleichheit in der Personalpolitik ausgezeichnet. In ihrer Begründung würdigt die Jury insbesondere die vielfältigen Maßnahmen, mit denen das Institut die Vereinbarkeit von Beruf und Familie sowie ein partnerschaftliches Betriebsklima unterstützt.
23.10.2013 • 35/2013
Rekommunalisierung ist kein Königsweg!
Der jahrelange Trend, kommunale Einrichtungen wie Wohnungsgesellschaften oder Versorgungsunternehmen zu privatisieren, scheint sich umzukehren. Die Hamburger Bürger haben jüngst per Volksentscheid Ihrem Senat aufgetragen, die an die Konzerne Vattenfall und E.on verkauften Energieversorgungsnetze der Stadt wieder vollständig in städtischen Besitz zu bringen. Martin Rosenfeld, Stadtökonom am Institut für Wirtschaftsforschung Halle (IWH), unterzieht in seinem Kommentar die mit der Rekommunalisierung verbundenen Hoffnungen auf Gesundung der kommunalen Haushalte einer kritischen Beurteilung.
The Social Capital Legacy of Communism-results from the Berlin Wall Experiment
Peter Bönisch, Lutz Schneider
European Journal of Political Economy,
No. 32,
2013
Abstract
In this paper we establish a direct link between the communist history, the resulting structure of social capital, and attitudes toward spatial mobility. We argue that the communist regime induced a specific social capital mix that discouraged geographic mobility even after its demise. Theoretically, we integrate two branches of the social capital literature into one more comprehensive framework distinguishing an open type and a closed type of social capital. Using the German Socio-Economic Panel (GSOEP) we take advantage of the natural experiment that separated Germany into two parts after the WWII to identify the causal effect of social capital on mobility. We estimate a three equation ordered probit model and provide strong empirical evidence for our theoretical propositions.
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Cost of Transaction and the Search for Skilled Workers: A Theoretical Explanation Based on the Theory of Institutions
Herbert S. Buscher, R. Ohliger, Andreas Siegert
IWH Discussion Papers,
No. 11,
2013
Abstract
Germany will have an increasing need of qualified staff across regions and economical sectors. Not only does this concern highly qualified of so-called MINT-professions (mathematics, IT, natural sciences and technology), but expands to qualified laborers of the health business and the arts and crafts sector. This demand cannot be met through the employment of jobless people from within the country, as the demographic change of a shrinking and ageing population works against it. Societal responsibility thus demands to attract qualified laborers as immigrants. In order to improve Germany’s image as a country of immigration for qualified staff, so-called soft-criteria should be strengthened aside hard facts, like income or employment opportunities. Such a policy actively needs to communicate to migrants that they and their family members are welcome to stay for good. Such an approach has recently been discussed as “Willkommenskultur” (“culture of welcoming”). It signals a change of paradigm in German immigration policy. A policy of „Willkommenskultur“ does not yet exist in Germany, at least it has not yet reached a satisfying level to be recognized and accepted as such by potential immigrants. Based on the theoretical conception of the Institutional Economy, approaches of a political change and its implementation are outlined. Those changes would imply governmental, societal and micro-economical shifts and changes.
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Gemeindegröße, Verwaltungsform und Effizienz der kommunalen Leistungserstellung – Das Beispiel Sachsen-Anhalt
Peter Haug
Raumforschung und Raumordnung,
No. 4,
2013
Abstract
Municipality Size, Institutions and Efficiency of Municipal Service Provision: The Case of Saxony-Anhalt: In this contribution we analyze the determinants of the efficiency of municipal service production using the example of the German state of Saxony-Anhalt. The focus lies on the effects of municipality size, institutional setting and spatial or demographic factors. We perform a robust non-parametric frontier estimation (Convex order-m).The results reveal e.g. no efficiency deficits of municipal associations and a significant impact of demographic factors and settlement structures.
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Taxes, Banks and Financial Stability
Reint E. Gropp
White Paper Series, No. 6,
August
2013
Abstract
In response to the financial crisis of 2008/2009, numerous new taxes on financial institutions have been discussed or implemented around the world. This paper discusses the connection between the incidence of the taxes, their incentive effects, and policy makers’ objectives. Combining basic insights from banking theory with standard models of tax incidence shows that the incidence of such taxes will disproportionately fall on small and medium size enterprises. The arguments presented suggest it is unlikely that the taxes will have a beneficial impact on financial stability or raise significant amounts of revenue without increasing the cost of capital to bank dependent firms significantly.
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Towards Deeper Financial Integration in Europe: What the Banking Union Can Contribute
Claudia M. Buch, T. Körner, Benjamin Weigert
German Council of Economic Experts Working Paper 02/2013,
No. 2,
2013
Abstract
The agreement to establish a Single Supervisory Mechanism in Europe is a major step towards a Banking Union, consisting of centralized powers for the supervision of banks, the restructuring and resolution of distressed banks, and a common deposit insurance system. In this paper, we argue that the Banking Union is a necessary complement to the common currency and the Internal Market for capital. However, due care needs to be taken that steps towards a Banking Union are taken in the right sequence and that liability and control remain at the same level throughout. The following elements are important. First, establishing a Single Supervisory Mechanism under the roof of the ECB and within the framework of the current EU treaties does not ensure a sufficient degree of independence of supervision and monetary policy. Second, a European institution for the restructuring and resolution of banks should be established and equipped with sufficient powers. Third, a fiscal backstop for bank restructuring is needed. The ESM can play a role but additional fiscal burden sharing agreements are needed. Direct recapitalization of banks through the ESM should not be possible until legacy assets on banks’ balance sheets have been cleaned up. Fourth, introducing European-wide deposit insurance in the current situation would entail the mutualisation of legacy assets, thus contributing to moral hazard.
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10.07.2013 • 26/2013
Claudia Buch in Expertengruppe der EU-Kommission berufen
Die Präsidentin des Instituts für Wirtschaftsforschung Halle, Professor Dr. Claudia Buch, ist von EU-Kommissionspräsident José Manuel Barroso in eine Expertengruppe zur Begutachtung der Chancen und Risiken eines europäischen Schuldentilgungsfonds und kurzfristiger Euroanleihen (Eurobills) berufen worden.